2006-08-23 02:19:35 · 10 answers · asked by lan 2 in Business & Finance ➔ Investing
Gold fluctuates because it is NOT used to mint money.
In this era, there is no practical reason to keep tons of gold in Fort Knox.
When this country was founded, gold was money.
One dollar was however much gold the dollar coin had in it.
When there was a crisis, the govt changed its policy, gradually moving away from gold:
During the Civil War, the US government started printing greenbacks, with 'the full faith and credit' of the US.
But gold and green were used together, and caused more chaos.
During the Great Depression, FDR ordered all Americans to cash in their gold, most did.
During the 1970's, Nixon declared that American greenbacks would no longer be redeemable for gold. An American dollar was money because the government said it was, and for no other reason.
2006-08-23 10:13:17 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Gold is a commodity, that is traded on the open market, just like coffee, soybeans, oil, or any other metal. Gold prices are affected in two ways. One is demand by industry. Gold is used in many industries, not just the jewelry industry. When demand goes up, prices go up, because there is a finite amount of gold produced every year. The second, is by speculators. These are people that buy gold as an investment. Traditionally, gold has been a "safe haven" in turbulent times, and in times of high inflation.
Governments do not base their currency on gold any longer.
2006-08-23 09:23:47 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Gold prices fluctuate, on account of demand & supply. In free market, this is common. The fluctuation is not based on only, our market, but also, international market. On date it is the safe mode of investment, when you compare to Stocks , Money, etc.. Government will not interfere with Gold like commomodities. It will only interfere, if the, day to day, necessities, are affected. If Goverment starts interfering, in such items, economy will be badly affected.
2006-08-23 11:52:01 · answer #3 · answered by Anonymous · 0⤊ 0⤋
govt should not control markets. Held gold at $35 an ounce for 30-40 yrs which was very disruptive to the economy. Has nothing to do with mint money.
2006-08-23 10:04:04 · answer #4 · answered by vegas_iwish 5 · 0⤊ 0⤋
We used to say our currency was worth X dollars per ounce, but inflation eroded the strength of the dollar (as it was bound to), and other countries (France) bought up dollars and then said "hey, trade this for all your gold". And we said no. That's when we went off the gold standard. Now, people will buy and sell gold for whatever price they can get for it. Gold is considered a safe investment, so when times are bad, people buy more gold and the price of gold goes up.
As for what supports our currency (which in turn supports all the other currencies in the world) now? Faith in the US economy and the almighty dollar.
2006-08-23 09:25:00 · answer #5 · answered by 006 6 · 0⤊ 0⤋
Gold price fluctuates because gold is a good conductor of electricity.
2006-08-23 09:22:36 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Why should the government control the price of gold? And why gold and not, say, silver or sugar?
2006-08-23 11:24:39 · answer #7 · answered by NC 7 · 0⤊ 0⤋
previous goverment NDA lead by Mr.Bajpayee price under control, any time congress goverment in india price never control.
2006-08-23 09:24:18 · answer #8 · answered by Sanjay S 2 · 0⤊ 0⤋
Its supply and demand, just like anything else that is openly traded in a free market.
2006-08-23 09:24:36 · answer #9 · answered by Robin A. 3 · 0⤊ 0⤋
it's to mess with your mind... man
2006-08-23 09:22:30 · answer #10 · answered by george 3 · 0⤊ 0⤋